Washington, D.C. of counsel K. Susan Grafton is the author of "New Rule 13h-1: The SEC Adopts a Large Trader Reporting System" [PDF] published in the October 31, 2011 issue of BNA’s Securities Regulation & Law Report.
Archives for October 2011
California Adopts Two New Corporate Forms to Advance Social Benefits
On October 9, 2011, California Governor Jerry Brown signed into law competing bills that create two new corporate forms in California — a "flexible purpose corporation" and a "benefit corporation" — intended to allow entrepreneurs and investors the choice of organizing companies that can pursue both economic and social objectives. The new corporate forms differ from traditional for-profit corporations that are organized to pursue profit (and not social purposes) and non-profit corporations that must be used solely to promote social benefits. These laws will take effect on January 1, 2012.
SEC Hosts Roundtable on Conflict Minerals
On October 18, 2011, the Securities and Exchange Commission ("SEC" or "Commission") held a public roundtable (the "Roundtable") to address the agency’s required conflict minerals rulemaking under Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
SEC’s Division of Corporation Finance Releases Legal Bulletin Clarifying Expectations with Respect to Registered Offering Opinions
Registration statements under the U.S. Securities Act of 1933, as amended, generally require a signed opinion of counsel regarding the legality of the securities being offered and sold. These opinions must be filed as an exhibit to the registration statement, typically before it becomes effective, and are commonly referred to as “Exhibit 5” opinions.
Delaware Court of Chancery Issues Important Guidance for Special Committees Negotiating M&A Transactions with Controlling Stockholders
On October 14, 2011, Chancellor Strine of the Court of Chancery of the State of Delaware issued a decision in In re Southern Peru Copper Corp. Shareholder Derivative Litig., C.A. No. 961-CS. In the 105-page decision, Chancellor Strine ultimately found that the controlling stockholder defendants had breached their fiduciary duty of loyalty and awarded damages of over $1.2 billion, which may be paid by the controlling stockholder by returning some of the stock consideration received from the controlled company in the transaction. The decision provides important guidance for companies engaging in M&A transactions with their controlling stockholders.
SEC Issues Interpretive Guidance on Cybersecurity Disclosures Under U.S. Securities Laws
On October 13, 2011, the staff of the Securities and Exchange Commission ("SEC") released disclosure guidance regarding public company disclosure obligations relating to cybersecurity risks and cyber incidents (the "Disclosure Guidance")."[1] The Disclosure Guidance reviews specific SEC disclosure rules that may require public companies to describe cybersecurity matters and provides SEC staff guidance on what type of disclosure, if any, may be necessary in light of a company’s particular facts and circumstances. The Disclosure Guidance is available at http://www.sec.gov/divisions/corpfin/guidance/cfguidance-topic2.htm. Cybersecurity is only the second topic to be addressed in the Division of Corporation Finance’s new Disclosure Guidance publications.Background